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Rating Action:

Moody's takes action on $535 Million of Subprime RMBS Issued by Various Trusts

15 Mar 2013

New York, March 15, 2013 -- Moody's Investors Service has downgraded the rating of 11 tranches, upgraded the rating of 1 tranches, confirmed the rating of one tranche, and affirmed the rating of 29 tranches from 6 transactions, backed by Subprime mortgage loans.

Complete rating actions are as follows:

Issuer: Aegis Asset Backed Securities Trust 2005-1

Cl. M1, Downgraded to A3 (sf); previously on Jan 10, 2013 Aaa (sf) Placed Under Review for Possible Downgrade

Cl. M2, Affirmed A3 (sf); previously on Jul 18, 2011 Downgraded to A3 (sf)

Cl. M3, Upgraded to Ba3 (sf); previously on Jul 18, 2011 Downgraded to B3 (sf)

Cl. M4, Affirmed C (sf); previously on Jul 18, 2011 Downgraded to C (sf)

Cl. M5, Affirmed C (sf); previously on Jul 18, 2011 Downgraded to C (sf)

Cl. M6, Affirmed C (sf); previously on Aug 13, 2010 Downgraded to C (sf)

Cl. B1, Affirmed C (sf); previously on Mar 13, 2009 Downgraded to C (sf)

Cl. B2, Affirmed C (sf); previously on Oct 31, 2008 Downgraded to C (sf)

Cl. B3, Affirmed C (sf); previously on Oct 31, 2008 Downgraded to C (sf)

Issuer: Asset Backed Securities Corporation Home Equity Loan Trust 2004-HE10

Cl. M1, Downgraded to A3 (sf); previously on Jan 10, 2013 Aaa (sf) Placed Under Review for Possible Downgrade

Cl. M2, Downgraded to Ba3 (sf); previously on Apr 12, 2012 Downgraded to Ba1 (sf)

Cl. M3, Downgraded to Ca (sf); previously on Mar 11, 2011 Downgraded to Caa2 (sf)

Cl. M4, Affirmed C (sf); previously on Apr 12, 2012 Downgraded to C (sf)

Cl. M5, Affirmed C (sf); previously on Jun 16, 2009 Downgraded to C (sf)

Cl. M6, Affirmed C (sf); previously on Jun 16, 2009 Downgraded to C (sf)

Issuer: Asset Backed Securities Corporation Home Equity Loan Trust 2005-HE2

Cl. M1, Downgraded to A3 (sf); previously on Jan 10, 2013 Aaa (sf) Placed Under Review for Possible Downgrade

Cl. M2, Downgraded to Baa1 (sf); previously on Jan 10, 2013 A1 (sf) Placed Under Review for Possible Downgrade

Cl. M3, Affirmed Caa3 (sf); previously on Jul 12, 2010 Downgraded to Caa3 (sf)

Cl. M4, Affirmed C (sf); previously on Jul 12, 2010 Downgraded to C (sf)

Cl. M5, Affirmed C (sf); previously on Jul 12, 2010 Downgraded to C (sf)

Issuer: Equifirst Mortgage Loan Trust 2003-1

Cl. I-F1, Confirmed at Aaa (sf); previously on Jan 10, 2013 Aaa (sf) Placed Under Review for Possible Downgrade

Cl. M-1, Affirmed A3 (sf); previously on Apr 19, 2012 Downgraded to A3 (sf)

Cl. M-2, Affirmed Ba1 (sf); previously on Apr 19, 2012 Downgraded to Ba1 (sf)

Cl. M-3, Affirmed Ca (sf); previously on Mar 7, 2011 Confirmed at Ca (sf)

Issuer: People's Choice Home Loan Securities Trust 2005-1

Cl. M2, Downgraded to A3 (sf); previously on Jan 10, 2013 Aaa (sf) Placed Under Review for Possible Downgrade

Cl. M3, Downgraded to A3 (sf); previously on Jan 10, 2013 A1 (sf) Placed Under Review for Possible Downgrade

Cl. M4, Affirmed Caa3 (sf); previously on Jul 21, 2010 Downgraded to Caa3 (sf)

Cl. M5, Affirmed C (sf); previously on Jul 21, 2010 Downgraded to C (sf)

Cl. B1, Affirmed C (sf); previously on Jul 21, 2010 Downgraded to C (sf)

Cl. B2, Affirmed C (sf); previously on Mar 13, 2009 Downgraded to C (sf)

Cl. B3, Affirmed C (sf); previously on Mar 13, 2009 Downgraded to C (sf)

Issuer: Saxon Asset Securities Trust 2005-3

Cl. A-1A, Downgraded to A3 (sf); previously on Jan 10, 2013 Aaa (sf) Placed Under Review for Possible Downgrade

Cl. A-2D, Downgraded to A3 (sf); previously on Jan 10, 2013 Aaa (sf) Placed Under Review for Possible Downgrade

Cl. M-1, Downgraded to A3 (sf); previously on Jul 16, 2010 Confirmed at Aa3 (sf)

Cl. M-2, Affirmed Ba2 (sf); previously on Jul 16, 2010 Downgraded to Ba2 (sf)

Cl. M-3, Affirmed Caa1 (sf); previously on Jul 16, 2010 Downgraded to Caa1 (sf)

Cl. M-4, Affirmed C (sf); previously on Jul 16, 2010 Downgraded to C (sf)

Cl. M-5, Affirmed C (sf); previously on Jul 16, 2010 Downgraded to C (sf)

Cl. M-6, Affirmed C (sf); previously on Jul 16, 2010 Downgraded to C (sf)

Cl. B-1, Affirmed C (sf); previously on Mar 13, 2009 Downgraded to C (sf)

Cl. B-2, Affirmed C (sf); previously on Mar 13, 2009 Downgraded to C (sf)

Cl. B-3, Affirmed C (sf); previously on Mar 13, 2009 Downgraded to C (sf)

RATINGS RATIONALE

The actions are a result of recent performance reviews of these transactions and reflect Moody's updated loss expectations on these pools.

Today's rating actions constitute of a number of downgrades, upgrades, and affirmations. The downgrades are primarily due to the tranches' weak interest shortfall reimbursement mechanisms.

The tranches downgraded to A3 (sf) do not have interest shortfalls but in the event of an interest shortfall, structural limitations in the transactions will prevent recoupment of interest shortfalls even if funds are available in subsequent periods. Missed interest payments on these tranches can typically only be made up from excess interest after the overcollateralization is built to a target amount. In these transactions since overcollateralization is already below target due to poor performance, any future missed interest payments to these tranches are unlikely to be paid. Moody's caps the ratings of such tranches with weak interest shortfall reimbursement at A3 (sf) as long as they have not experienced any shortfall.

Ratings on tranches that currently have very small unrecoverable interest shortfalls are capped at Baa3 (sf). For tranches with larger outstanding interest shortfalls, Moody's applies "Moody's Approach to Rating Structured Finance Securities in Default" published in November 2009. These rating action take into account only credit-related interest shortfall risks.

The methodologies used in these ratings were "Moody's Approach to Rating US Residential Mortgage-Backed Securities" published in December 2008, "Pre-2005 US RMBS Surveillance Methodology" published in January 2012, and "2005 -- 2008 US RMBS Surveillance Methodology" published in July 2011. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

The above mentioned approach "Pre-2005 US RMBS Surveillance Methodology" is adjusted slightly when estimating losses on pools left with a small number of loans to account for the volatile nature of small pools. Even if a few loans in a small pool become delinquent, there could be a large increase in the overall pool delinquency level due to the concentration risk. To project losses on pools with fewer than 100 loans, Moody's first estimates a "baseline" average rate of new delinquencies for the pool that is dependent on the vintage of loan origination (11% for all vintages 2004 and prior). The baseline rates are higher than the average rate of new delinquencies for larger pools for the respective vintages.

Once the baseline rate is set, further adjustments are made based on 1) the number of loans remaining in the pool and 2) the level of current delinquencies in the pool. The volatility of pool performance increases as the number of loans remaining in the pool decreases. Once the loan count in a pool falls below 75, the rate of delinquency is increased by 1% for every loan less than 75. For example, for a pool with 74 loans from the 2004 vintage, the adjusted rate of new delinquency would be 11.11%. In addition, if current delinquency levels in a small pool is low, future delinquencies are expected to reflect this trend. To account for that, the rate calculated above is multiplied by a factor ranging from 0.85 to 2.25 for current delinquencies ranging from less than 10% to greater than 50% respectively. Delinquencies for subsequent years and ultimate expected losses are projected using the approach described in the methodology publication listed above.

When assigning the final ratings to senior bonds, in addition to the methodologies described above, we considered the volatility of the projected losses and timeline of the expected defaults. For bonds backed by small pools, we also considered the current pipeline composition as well as any specific loss allocation rules that could preserve or deplete the overcollateralization available for the senior bonds at different pace.

Moody's also adjusts the methodologies noted above for Moody's current view on loan modifications. As a result of an extension of the Home Affordable Modification Program (HAMP) to 2013 and an increased use of private modifications, Moody's is extending its previous view that loan modifications will only occur through the end of 2012. It is now assuming that the loan modifications will continue at current levels into 2014.

Other factors used in these ratings are described in "Moody's Approach to Rating Structured Finance Securities in Default" published in November 2009.

The above methodologies only applies to pools with at least 40 loans and a pool factor of greater than 5%. Moody's may withdraw its rating when the pool factor drops below 5% and the number of loans in the pool declines to 40 loans or lower unless specific structural features allow for a monitoring of the transaction (such as a credit enhancement floor).

The primary sources of assumption uncertainty are our central macroeconomic forecast and performance volatility as a result of servicer-related activity such as modifications. The unemployment rate fell from 8.5% in December 2011 to 7.9% in January 2013. Moody's forecasts a unemployment central range of 7.0% to 8.0% for the 2013 year. Moody's expects housing prices to continue to rise in 2013. Performance of RMBS continues to remain highly dependent on servicer activity such as modification-related principal forgiveness and interest rate reductions. Any change resulting from servicing transfers or other policy or regulatory change can also impact the performance of these transactions.

A list of these actions including CUSIP identifiers may be found at:

Excel: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF320622

A list of updated estimated pool losses and sensitivity analysis is being posted on an ongoing basis for the duration of this review period and may be found at:

2005-2008

Excel: http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBS_SF198689

Pre 2005

Excel: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF237255

REGULATORY DISCLOSURES

Moody's received and took into account one or more third party assessments on the due diligence performed regarding the underlying assets or financial instruments in these transactions and the assessments had a neutral impact on the rating.

In conducting surveillance of these credits, Moody's considered performance data contained in servicer and remittance reports. Moody's obtains servicer reports on these transactions on a periodic basis, at least annually.

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Mark Branton
Asst Vice President - Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Amita Shrivastava
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's takes action on $535 Million of Subprime RMBS Issued by Various Trusts
No Related Data.
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